The report comes amid much discussion about what the "new normal" should be. Unemployment has remained above 9% for 21 straight months, and economists and policymakers, including Fed Chairman Ben Bernanke, have repeatedly said it's likely to remain high through the next several years.

And that spurs experts to ask, is high unemployment a permanent economic condition, or merely a temporary phenomenon?

Experts at the San Francisco Fed say a higher rate is probably temporary, but driven by some deep-seated structural issues.

Unemployment is staying high partly because of a mismatch between workers' skills and what employers are looking for, say John Williams, an executive vice president at the San Francisco Fed, and research associate Justin Weidner.